Sourcing Terms,
explained.

The lowest quantity a factory will produce for a specific product, usually driven by raw-material minimums, machine set-up, packaging minimums and labour efficiency.

The minimum total value a factory needs to make an order commercially worthwhile, regardless of the unit count.

The price per individual item, usually quoted excluding tooling, freight, duty, VAT, packaging, testing and inspection.

A one-off cost for creating a mould, die, cutter, jig, embossing plate, injection mould or other custom production tool.

A charge for preparing production — printing screens, embroidery files, engraving plates, artwork or machine set-up.

The time required to produce and prepare goods for dispatch from the factory.

The time required to produce a pre-production, approval or custom sample.

The factory time required to produce a bulk order after all approvals are in place.

The agreed structure for paying the supplier — for example 30% deposit, 70% before shipment.

A preliminary invoice from the supplier setting out specification, quantity, price, payment terms and shipping terms before the order is confirmed.

A formal order document issued by the buyer to the supplier, referencing specification, quantity, price, terms and delivery.

Producing goods in defined batches rather than as a continuous run, often used to manage colours, sizes or material variations.

The acceptable range of variation in dimensions, weight, colour, finish or quantity.

A statistical sampling standard used in quality inspections to decide pass/fail based on defects found in a sample of the order.

The processes used to check that production meets the agreed specification, before, during and after manufacture.

A sample produced before bulk manufacturing begins, used to confirm specification, materials, colour, branding and packaging.

The signed-off reference sample that bulk production must match. Often retained by both buyer and factory.

The full production run of the order, following sample approval.

The number of units packed in a single export carton.

A carton inside the master export carton, often used for retail-ready packaging or sub-quantities.

The outer export carton used for shipping. Carton dimensions and weight drive freight charging.

The seller makes goods available at the factory. The buyer arranges and pays for collection, export clearance, freight, import clearance, duties, taxes and final delivery.

The supplier delivers the goods to the agreed port and loads them onto the vessel. From that point, responsibility transfers to the buyer.

The seller pays cost, insurance and freight to the destination port. The buyer remains responsible for import clearance, duties, taxes and onward delivery.

The seller pays freight to the destination port, but insurance is not included.

The seller pays carriage to a named destination, but risk transfers to the buyer when the goods are handed to the first carrier.

Like CPT but the seller also arranges insurance to the named destination.

The seller arranges delivery to a named destination. The buyer is usually responsible for import duties, taxes and customs clearance.

The seller delivers to a named place and is responsible for unloading. Duty and clearance usually remain the buyer's responsibility.

The seller is responsible for delivering the goods to the agreed destination including import duty, taxes and customs clearance.

An older trade term often used informally to mean goods are delivered without duties and taxes paid by the seller. Replaced by DAP in current Incoterms.

A standardised set of trade terms published by the ICC defining cost, risk and responsibility allocation between buyer and seller in international trade.

A company that arranges shipment of goods on behalf of the buyer or seller, often handling export clearance, freight booking, documentation and customs at the destination.

A document issued by the carrier that acts as receipt for the goods, evidence of the contract of carriage and (when negotiable) a document of title.

A non-negotiable transport document issued by an air carrier acting as a receipt for the goods and evidence of the contract of carriage.

The seller's invoice for the goods being shipped, used by customs to determine duty and VAT.

A document showing the contents, dimensions and weights of each carton in a shipment.

A standardised numerical code used to classify products for customs and duty purposes.

The percentage applied by customs to the value of imported goods to calculate import duty.

VAT charged on imported goods at the destination, typically calculated on CIF value plus duty.

The process of submitting documentation and paying any duty/VAT to release imported goods from customs.

The total cost of getting the product into the buyer's possession ready for sale or use — including unit cost, packaging, freight, insurance, duty, VAT, clearance, inspection, local delivery and any rework.

Local fees levied at the origin or destination port — terminal handling, documentation, security, customs.

A fee charged by the carrier or terminal when a container is not collected within the agreed free time.

The volume of goods that fills a sea container — typically 20ft (33 CBM usable) or 40ft (67 CBM usable).

Sea freight option where multiple shippers share a single container; charged by volume.

Sea freight option where a single shipper books an entire container.

The legal entity responsible for importing the goods and ensuring they comply with local laws and customs requirements.

A regulatory conformity mark for products sold in the European Economic Area showing the product meets applicable EU safety, health and environmental requirements.

The UK conformity mark used for certain products placed on the market in Great Britain. Applies to many product types that previously used CE marking in the UK.

A regulation controlling chemicals and substances used in products sold in the EU and, separately, under UK REACH in Great Britain.

Restricts certain hazardous materials in electrical and electronic equipment.

Regulations covering the collection, recycling and disposal obligations for electrical goods.

Relates to whether electrical or electronic products interfere with, or are affected by, other electronic equipment beyond defined levels.

Applies to certain electrical equipment operating within defined voltage limits — typically mains-powered consumer and commercial products.

Safety report required for cosmetic products before they can be placed on the UK or EU market.

A series of harmonised European toy-safety standards covering mechanical, physical, chemical and flammability hazards.

Baseline UK requirement that products placed on the market must be safe for normal or reasonably foreseeable use.

Rules covering materials intended to come into contact with food or drink — bottles, mugs, lunch boxes, straws, containers, kitchenware and packaging.

Germany's food and feed code, often referenced as the gold standard for food-contact testing in Europe.

US regulator covering food, drug, cosmetic and medical-device safety, including food-contact materials.

A formal manufacturer statement that the product meets the applicable legislation.

The evidence pack supporting a Declaration of Conformity — design, risk assessment, test reports, instructions, labels.

A laboratory report documenting tests performed against a specific standard for a specific product, with results.

A documented evaluation of foreseeable risks from a product and the controls used to manage them.

The ability to trace a product or production batch backwards to materials, suppliers and forwards to customers, usually via batch codes or serial numbers.

A named UK or EU legal entity that takes regulatory responsibility for a product, particularly cosmetics and certain other regulated categories.

A claim that the product contains material that has been recovered and processed for reuse.

A claim that the product or material can be recycled at end of life. Different from being made from recycled content.

A product designed to be used many times rather than once.

A material that can break down through biological processes under certain conditions.

A product that can break down into compost under specific composting conditions.

A material designed to break down in a typical home compost environment within a defined timeframe.

A material designed to break down in an industrial composting facility at high temperatures.

A claim that carbon emissions associated with a product, business or activity have been measured and offset or otherwise balanced.

A balance between greenhouse gases emitted and removed, usually claimed at organisation or product level.

A product made from materials grown according to organic farming standards, usually with restrictions on synthetic pesticides and fertilisers.

A broad term suggesting reduced environmental or social impact.

A broad marketing phrase suggesting environmental benefit.

A claim that a product, material or process has a reduced environmental footprint.

A model in which products and materials are designed to be reused, repaired, refurbished, recycled or composted, keeping them in use as long as possible.

The ability to follow a product or material back through the supply chain to its origin.

A documented record of who has held a material or product at every stage from origin to finished goods.

Material that has been used by an end consumer, collected and processed into new material.

Material recovered from manufacturing scrap and reprocessed before reaching the consumer.

Polyester made from recycled PET sources, commonly recycled plastic bottles. Used in bags, clothing, lanyards, drinkware and packaging.

Fibre derived from bamboo, often processed into viscose for textiles. Marketing claims vary widely.

A certification scheme for responsibly sourced forest-based materials such as paper, card, wood and some packaging.

A certification standard for recycled content and chain of custody, common in textiles, bags and apparel.

A standard used to verify recycled content and chain of custody, with fewer additional criteria than GRS.

A textile processing standard for organic fibres, including environmental and social criteria.

A textile certification system that tests products for certain harmful substances.

A structured digital record of product information — material origin, repairability, recyclability, environmental data — being introduced under the EU Ecodesign for Sustainable Products Regulation.